Longitudinal Analysis of Generic Substitution

20 Pages Posted: 24 Sep 2010  

Dag Morten Dalen

BI Norwegian Business School - Department of Economics

Marilena Locatelli

University of Turin - Department of Economics

Steinar Strom

University of Oslo; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: September 23, 2010

Abstract

Using an extensive longitudinal dataset extracted from the Norwegian Prescription Database (NorPD) containing all prescriptions written in the period January 2004 to June 2007, we selected two particular drugs (chemical substances) used against cholesterol. The two brand-name products on the Norwegian markets were Provachol (atc code C10AA03) and Zocor (atc code C10AA01). The generics are Provastatine and Simastatine. The model accounts for taste persistence and is estimated on panel data. We find that prices have a negative impact on transitions in the sense that an increase in the brand price will reduce the transition from generics to brand and likewise an increase in the generic price will reduce the transition from brand to generics.

Keywords: generics, substitution, microdata, random utility model, longitudinal data

JEL Classification: C35, I18, L65

Suggested Citation

Dalen, Dag Morten and Locatelli, Marilena and Strom, Steinar, Longitudinal Analysis of Generic Substitution (September 23, 2010). CESifo Working Paper Series No. 3176. Available at SSRN: https://ssrn.com/abstract=1681279

Dag Morten Dalen

BI Norwegian Business School - Department of Economics ( email )

N-0442 Oslo
Norway
+47 46410774 (Phone)

Marilena Locatelli

University of Turin - Department of Economics ( email )

Lungo Dora Siena, 100A
Torino, 10156
Italy
+39 011 6703894 (Phone)
+39 011 6703895 (Fax)

HOME PAGE: http://www.de.unito.it/web/member/locatelli/personal-inf.htm

Steinar Strom (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

University of Oslo ( email )

Ragnar Frisch Centre for Economic Research
N-0317 Oslo
Norway

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